The Indian Sugar Mills Association (ISMA) has said if the Government continues to block sugar exports, its price in the domestic market will fall further which will affect the cane growers.

ISMA said with the country's sugar output expected to rise 7.5 per cent higher to 26.5 million tonnes for the next season, the cane growers will be denied higher prices.

Addressing a press conference following ISMA's interaction with Karnataka sugarcane growers, the Association President, Mr Narendra Murkumbi, pointed out that according to the Agricultural Ministry data, country could see the area under sugarcane expanding 7-8 per cent mainly in Uttar Pradesh, one of the two biggest sugarcane-growing States.

“This will have direct impact on production and we may see 26.5 million tonnes production in the 2011-12 sugar season (starting October),” he said. He said the annual domestic demand is stagnant between 22- 22.5 million tonnes.

Mr Murkumbi said ISMA has been lobbying with the Union Government for deregulation of the sugar industry, allowing exports and speeding up of the ethanol blending programme. The sugar industry is under the control of the Government and it also has to part with some amount for distribution under PDS.

“In no other country in the world – not even in small countries like Kenya, Tanzania etc – such type of levies have been imposed on sugar industry. We have raised our demand before the Government to de-regulate the industry in phased manner. To start with, the following two steps may be initiated like - abolition of levy sugar obligation on sugar mills and abolition of monthly regulated release mechanism,” said Mr Murkumbi.

“With low domestic ex-mill prices and improving international sugar prices, the mills stand to gain about Rs 700 a quintal extra from sugar exports. With a surplus sugar year next season (2011-12) also and expected sugar surplus in the international market from October 2011, it is prudent to export maximum possible quantities immediately,” Mr Murkumbi said.

Ethanol blending

On the issue of ethanol blending programme, Mr Murkumbi said to ensure more supplies of ethanol, it is important for the Government to finalise the ethanol price as early as possible, recommendation for which is now pending with them for over two months.

“The national bio-fuel policy, approved by the Government, has plans for a 20 per cent ethanol blending programme (EBP) by 2017. This can be achieved only if we continue with the approved plan of the Cabinet, reiterated again and again by the government. Questions and doubts are being raised by vested interests who procure alcohol at a throwaway price for other uses,” he added.

The EBP programme is essential for the energy security of the nation, which will reduce pollution from fossil fuel and improve our use of renewable energy in the form of fuel ethanol, he added.

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